“‘Empty towns’ and ‘ghost towns’ attract a lot of public attention, and that has a lot to do with the fact that these are local government initiatives and investments,” says Pan Yingli, a professor of finance at the Research Center for Modern Finance at Shanghai Jiaotong University.

With taxes collected centrally and then redistributed to local governments, land has become the principle source of income for provincial officials, who normally can expect a redistribution of only 50 percent of fiscal revenue after paying 85 percent of the municipal purse, according to Pan. Grandiose land projects, thus, are a ripe moneymaking vehicle for officials. German houses are too dark-colored,” Liu argues. “They look depressing.”

“This creates bubbles, because the prosperity of properties and cities ultimately comes from the accumulation of people, but developing real estate alone doesn’t create jobs—so [these new towns] don’t attract laborers or their families. As a result, only the land per se is ‘urbanized,’ and so become the ‘ghost towns’ that we see.”

As with many real-estate projects, the key to avoiding disaster relies on several things all going the developers’ way: Connections must be well-maintained, oversight should ideally be avoided, local power structures must be preserved, and the infrastructure needed to breathe life into a remote, self-contained development has to be completed on time.

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